2011 will probably be remembered in New Hampshire, from a political point of view, for the dramatic cutbacks in the state budget. Closing a gap as large as $900 million requires lots of cuts and the Republican-controlled legislature obliged.

Looking ahead, fiscal concerns are still at the core of what 2012 will bring, but without the need to pass another state budget until 2013, the door is open for more legislative action and political news. Of course, the Republican presidential primary will dominate national headlines for much of the winter and spring, but state political developments will be just as interesting. There are a number of issues, such as gay marriage repeal, that the legislature will probably take up in 2012. And there are plenty of political characters and playmakers who may or may not run for office. Here’s a look at some key issues and people we’ll be watching.

Repeal gay marriage?

The big question on the legislative front is gay marriage repeal, at least in terms of the attention it would get. Democrats passed a law legalizing gay marriage in 2009, and though it isn’t a top priority for all Republicans, it is for some. A bill that calls for repeal awaits a hearing in January.

The bill will be a tough sell, particularly as fiscal concerns still loom. It will be easy for Democrats and some Republicans to argue that social issues are not on the forefront of residents’ minds. On the other hand, it might be now or never. Republicans can’t expect to have huge majorities like this, well, ever again. If the House and Senate could pass the bill, Democrats would be expecting Gov. John Lynch to veto any repeal effort.

The gubernatorial race

We know Lynch isn’t running, likely to the chagrin of Democrats, but the field has started to take shape. We’ve known for a while that Ovide Lamontagne and Kevin Smith are in the mix for the GOP and that Maggie Hassan is in on the Democratic side. Steve Marchand, the former Portsmouth mayor, is apparently out, as is Stonyfield Yogurt CEO Gary Hirshberg. Former state senator Jackie Cilley could be getting in the mix, reports suggest. Other names are starting to surface on the Democratic side as well.

A few questions to ponder: Will Republican Manchester Mayor Ted Gatsas run for governor? He has admitted he’s considering it and he could shake up a primary race that looked to be Lamontagne’s to lose a few months ago. That still might be the case, but Gatsas would surely have a big impact. Will any other imposing candidates for governor emerge on the Democratic side? Hassan, a former state senator, had often been talked about as a candidate for governor at some point, but that was before she lost her senate reelection bid in 2010. She’s getting a big head start on any other Democratic contenders, but there is still plenty of time. We’ll be watching to see who else, if anyone, emerges.

Congressional races

It’s clear U.S. Rep. Charlie Bass will face a very tough reelection battle with Anne McLane Kuster, who narrowly lost to Bass in 2010. It’s probably going to be extremely close again, and it’s unlikely anyone else will run on the Democratic side. McLane’s campaign was lauded last time around in defeat, though many had picked her to win in the final days of the campaign.

U.S. Rep. Frank Guinta could be facing another fight with former Rep. Carol Shea-Porter, though she isn’t alone on the Democratic side, with Joanne Dowdell and Andrew Hosmer running. Guinta beat Shea-Porter handily in 2010 when she was seeking reelection, but Shea-Porter has a formidable grassroots organization.
What helps Kuster is that the 2nd Congressional District is known to be a more liberal district. In the same way, what helps Guinta is that the 1st District is more Republican, and according to a recent University of New Hampshire study, the district might be growing more Republican.

Education funding

It’s a battle that’s been going on for years and years now. The Senate, the House and Lynch tried to tackle it with proposals last year, with only the House version surviving. That bill awaits a hearing from the Senate in January. Passing a constitutional amendment, which even if it passes the House and Senate would still require a two-thirds vote from the general public, would be extremely difficult.

But it’s an area where there perhaps remains some common ground between Republican leaders and the governor. House Majority Leader D.J. Bettencourt said as much last month.

Lynch isn’t going to carry as much weight this year as he has in the past, given that he’s in full lame duck status. But he was able to pick and choose where to make stands this past year, particularly with the right-to-work bill. The House sustained Lynch’s veto of that bill last month. Lynch was also able to effectively squash expanded gambling legislation.

Finding a long-term solution to the education funding question has been something Lynch has long talked about. It’ll be interesting to follow what type of compromise bill, if any, emerges from the coming session.

Privatize corrections?

This is another area where there appears to be some common ground between Republicans and Lynch. Lynch has also long talked about privatizing corrections or at least portions of corrections. Republican legislators have also been in favor of some form of privatization.

Corrections is one of the major drivers for the state budget, so officials have been looking for ways to get the prison population under control and to reduce costs. In 2010 lawmakers enacted a controversial prison reform bill that released prisoners a few months early under supervision. The policy was aimed at reducing recidivism, which would subsequently reduce prison costs. There could be room to address the privatization issue this session.

What if revenues increase?

This could be a big question for the year. Republicans, who admittedly made conservative revenue estimates in creating the state budget, have said that if revenues come in greater than their expectations, they’d use any additional revenue to pad the state’s reserve account, the Rainy Day Fund. Democrats could have something to say about that if the money starts rolling in, not that anyone is really expecting the money to roll in.

With major cuts to Health and Human Services and state hospitals, Democrats could and probably would make the case that extra revenue should go to restoring programs the legislature cut this past year. On the numbers front, Republicans can call the shots, but on the messaging front, Democrats would be able to make a compelling case in an election year.